Have you ever watched a comedian bomb? It’s painful to watch, right? You squirm around in your seat counting the seconds (which seem like minutes) until their routine and the misery ends. But here’s the thing, sometimes the reason they aren’t getting any laughs isn’t because their jokes aren’t funny. It’s because they are delivering them to the wrong audience. The right group of people could find the same comedian hilarious.

Same goes with debt collection. If you have a one-size-fits-all collection strategy you might find yourself bombing more often than not. If you want to be more successful, try to tailor your tactics and techniques to your debtor audience. Many factors need to be taken into consideration before deciding which collection practices should be used. For example, considering the age of a consumer can really make a difference. A particular collection tactic that works well for one age group may not for another.

I recently read an article by David R Glezerman in the Collector magazine that did a nice job describing why varying your approach works so well. The article’s opening line grabbed me immediately. “Understanding the unique characteristics of each consumer group can help you make stronger and more productive connections.”

Who doesn’t want that, right?

As mentioned earlier, the age (think generation) of the consumer owing the debt is a key characteristic you should consider when deciding which communication strategy will be most successful. Over the years, we’ve written several blogs you might find useful that discuss the strengths (or weaknesses) of a particular age group such as The Lost Art of Conversation. Help is on the Way!

Glezerman’s article presented in the ACA International publication did a nice job of compiling a lot of data in order to list the strengths and weaknesses of each generation. It explained that when you understand the characteristics of each generation you gain insight into the how and why the debt exists. And that can make a big difference on how you go about getting it paid.

Here are the highlights of the article:

Baby Boomer generation: Their strengths include a good work ethic and strong communication skills. Their challenges? Poor financial literacy skills (they aren’t alone. Read why here.) and many, 59 percent of those who have kids, are still financially supporting adult children. This group still responds well to traditional communication methods like telephone calls and letters although many also use current technologies when buying and more importantly paying bills.

Average nonmortgage debt for this generation: $27,500

Generation X: Even though this is the first generation not expected to do as well financially as their parents they are highly educated and tech savvy. But they are also cynical when it comes to creditors and exhibit a strong sense of entitlement. Preferred communication for this generation? Cell phones.

Average nonmortgage debt: $30,300

Millennials: Are considered the most educated generation. They are extremely tech-savvy and well-versed in digital tools. Unfortunately, they don’t respond well to authority and want what they want now. Consequently, they spend their money as fast as they make it. Even though riddled with compliance issues their preferred communications tools are texts, emails and voicemails.

Average nonmortgage debt: $22,800

As you can see, utilizing traditional collection strategies on Gen-Xers or millennials oftentimes will not be as successful as when used on baby boomers. These tech-savvy consumers want to communicate through more up-to-date technologies.

Armed with insight into these generational differences, we, here at A. Alliance, recommend you modify your “consent to call” agreement and upgrade it to a “consent to contact” agreement. This can help mitigate compliance issues while improving your collection efforts by giving the younger generations what they want. Win-win!

Here is sample language for your “Consent to Contact” agreement

You agree, in order for us to service our account or to collect any amounts you may owe, we may contact you by telephone at any telephone number associated with your account, including wireless telephone numbers, which could result in charges to you. We may also contact you by sending text messages or e-mails, using any e-mail address you provide to us. Methods of contact may include using pre-recorded/artificial voice messages and/or use of an automatic dialing device, as applicable.

I/We have read this disclosure and agree that the Lender/Creditor may contact me/us as described above.

_____________________ ______________

Borrower/Customer: Signature date:

A. Alliance Collection Agency, Inc. is a full service, licensed accounts receivable management and debt collection agency providing highly effective, customized one on one management and recovery solutions for our business partners. Founded in northern Illinois in 2005, we have been proudly improving the bottom-line on behalf of our business partners in and around Chicagoland for over 13 years.

Another blog on email. How boring you say. Well, let’s go ‘Deep’ on this one, as in Deepak Chopra.

Yes, this was a surprise to me, too, as I am most familiar with Mr. Chopra as an author and lecturer on wholeness and his suggestions for living an engaging life.

When I saw this blog “5 reasons it’s a good idea to instantly respond to emails” (read it here) I was initially engaged by the relevance of subject. Then I saw his name as the co-author and of course the link between his name and what otherwise may be a mundane subject further grabbed my attention.

As it turns out, he and his co-author, Kabir Sehgal, are contributors to the “Leadership” forum posts on CNBC.com. Mr. Chopra has greater name recognition but his co-author, Mr. Sehgal is a former vice president at JPMorgan Chase, a multi-Grammy Award winner as well as a U.S. Navy veteran. They have the credibility to write on leadership, but why such a mundane subject as responding to e-mail?

Other forms of communication have supplemented, or even begun to eclipse, good old email. However, it is still the standard of communications in the business world.

However, my observation has been that how we handle our emails is all over the board. There are opinions aplenty on the best way to handle the volume of email we receive. Yet one thing I have noticed as well is how inconsistent we all are in simply responding to a professional and solicited email.

To be clear, spam and unsolicited email need to be handled differently. Yet how often do you send an email to a client or colleague and it seems to just fall into something like the infamous ‘black hole?’

This is the situation Chopra and Shegal address in their blog. How does this relate to leadership? In my opinion it says a lot about a person, and their communications skills, when a prompt professional response is received.

As they point out, however, “When it comes to email correspondence, there seems to be two types of people: those who acknowledge that they received an email and those who don’t.”

Too true.

They go on to list five reasons that they endorse the first group and encourage prompt response.

It’s courteous: Personal and professional courtesy is always welcome. “By sending a quick acknowledgement email, you are being polite, well-mannered, and respectful.”

You will be seen as reliable: Establishing a trusting relationship is invaluable. “When you send email acknowledgments to those who contact you, you are also letting them know that you are responsive, prompt, and even trustworthy. Those who send you messages will know you’re a reliable person. You are giving the impression that you mean business and appreciate speed in your correspondence.”

It forces you to act: I find it too easy to let an email slide down the list in my inbox. I will get to it later. “Don’t wait around for your inbox to overflow. As soon as you get something that requires a response, shoot the sender a quick note. When you respond to someone, it creates a sense of personal accountability and shows that you’re going to take care of whatever you said that you would.”

It buys you time: We are an impatient world. However, “Your email acknowledgements don’t need to be long. You can simply say ‘OK’ or ‘Understood.’ By using these staccato statements, you are buying yourself time for contemplation and deliberation. Instead of someone waiting for your long reply, they will relax and cut you some slack that whatever they are requesting will get done.”

It helps you achieve inbox zero: A great goal by any measure. “When you reply quickly, you can move onto the next message. If you’re moving with a brisk tempo, you may be able to achieve “inbox zero” — that magical moment when your email inbox has zero messages that need a response. For those of you who are compulsive about communication, there is no greater accomplishment when it comes to email productivity.”

Alliance Collection Agency, Inc. is a full service, licensed accounts receivable management and debt collection agency providing highly effective, customized one on one management and recovery solutions for our business partners. Founded in northern Illinois in 2005, we have been proudly improving the bottom-line on behalf of our business partners in and around Chicagoland for over 13 years.

We all have habits, of course; both good and bad. Yet, it seems to me that when the word ‘habit’ is used it is more often than not preceded by ‘bad.’ Certainly, the consequences and impact of ‘bad habits’ can be devastating if not corrected; but bad habits don’t change by themselves, either in our personal lives or in business. Changing them takes a willingness and commitment to change and often just plain hard work. However, many of them are so ingrained in our actions that we don’t even know we have them. Yet sometimes all it takes is a focus on changing one thing and other positive changes fall into place.

A while back I ran into a book on habits called The Power of Habit: Why We Do What We Do in Life and Business by Charles Duhigg. Duhigg, besides being an author, is also a journalist for the New York Times and his book is a very insightful look into how habits shape not only our personal lives but our professional lives as well.

One particularly interesting chapter centered on Alcoa Aluminum. In the late 1980’s the Company was in trouble and brought in a new CEO named Paul O’Neill to fix things. Of course, Alcoa had been virtually a household name for decades making the aluminum that goes into everything from pop cans to our cars. Anyway, in his introduction to the investment community, O’Neill, rather than talking synergies, shareholder value, ways to increase cash flow and stock price, came out and talked about something completely different: worker safety!

As Duhigg reports, O’Neill realized very early on there was a critical need to break some very bad business habits ingrained into the culture of the company which were leading to high worker injury rates. Those injury rates were symptomatic of some very deeply ingrained bad business habits that were also damaging the company.

Quoting Duhigg and O’Neill: “So how did O’Neill make one of the largest, stodgiest, and most potentially dangerous companies into a profit machine and a bastion of safety? By attacking one habit and then watching the changes ripple through the organization. ‘I knew I had to transform Alcoa,’ O’Neill told me [Duhigg]. ‘But you can’t order people to change. That’s not how the brain works. So I decided I was going to start by focusing on one thing. If I could start disrupting the habits around one thing, it would spread throughout the entire company.’ O’Neill believed that some habits have the power to start a chain reaction, changing other habits as they move through an organization. Some habits, in other words, matter more than others in remaking businesses and lives. These are ‘keystone habits,’ and they can influence how people work, eat, play, live…”

Well, I will leave it to you to read the whole story, but O’Neill turned the company around by breaking bad habits which had caused not only huge decreases in worker productivity, they also improved the safety and efficiency of the manufacturing process. So, while breaking the company of bad habits he not only reduced on the job injury, he also revived a company moving rapidly toward extinction. Amazing story.

So, what about your business habits? One thing we encourage our clients to do is look with fresh eyes at how they are handling their delinquent accounts and how much may be driven by habit, and not good business practice.

One area to specifically focus on is the detail of the information you receive from your customers. Do you regularly review the content of the agreements your customers sign obligating them to pay you for your services? Clear understanding of payment terms is beneficial to both parties, and will not only to ensure you have the best document in the event you incur a debt which needs the help of a company like ours, it also ensures you are in line with the most recent changes in the law.

Don’t let bad, unrecognized bad habits cause unintended consequences for your business! UCS is here to help make sure your bad debts are collected in the most efficient and professional way possible.

A. Alliance Collection Agency, Inc. is a full service, licensed accounts receivable management and debt collection agency providing highly effective, customized one on one management and recovery solutions for our business partners. Founded in northern Illinois in 2005, we have been proudly improving the bottom-line on behalf of our business partners in and around Chicagoland for over 13 years.